Loans and Allowance for Losses and Concentrations of Credit Risk - Loans and Allowance for Losses and Concentrations (Tables)

3 Months Ended

Mar. 31, 2016

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Loans

Farmer Mac classifies loans as either held for investment or held for sale. Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled basis. As of March 31, 2016 and December 31, 2015, Farmer Mac had no loans held for sale. The following table displays the composition of the loan balances as of March 31, 2016 and December 31, 2015:

Table 5.1



	As of March 31, 2016									As of December 31, 2015
	Unsecuritized			In Consolidated Trusts			Total			Unsecuritized			In Consolidated Trusts			Total
	(in thousands)
Farm & Ranch	$	2,206,191		$	816,267		$	3,022,458		$	2,249,864		$	708,111		$	2,957,975
Rural Utilities	991,851			—			991,851			1,008,126			—			1,008,126
Total unpaid principal balance⁽¹⁾	3,198,042			816,267			4,014,309			3,257,990			708,111			3,966,101
Unamortized premiums, discounts and other cost basis adjustments	6,410			—			6,410			423			—			423
Total loans	3,204,452			816,267			4,020,719			3,258,413			708,111			3,966,524
Allowance for loan losses	(3,779		)	(750		)	(4,529		)	(3,736		)	(744		)	(4,480		)
Total loans, net of allowance	$	3,200,673		$	815,517		$	4,016,190		$	3,254,677		$	707,367		$	3,962,044


⁽¹⁾	Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business.

Allowance for Credit Losses on Financing Receivables [Table Text Block]

Allowance for Losses

Farmer Mac maintains an allowance for losses presented in two components on its consolidated balance sheets: (1) an allowance for loan losses to account for estimated probable losses on loans held, and (2) a reserve for losses to account for estimated probable losses on loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities. As of both March 31, 2016 and December 31, 2015, Farmer Mac's total allowances for losses were $6.6 million. See Note 6 for more information about off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs.

The following is a summary of the changes in the total allowance for losses for the three months ended March 31, 2016 and 2015:

Table 5.2



	For the Three Months Ended
	March 31, 2016						March 31, 2015
	Allowance for Loan Losses		Reserve for Losses		Total Allowance for Losses		Allowance for Loan Losses		Reserve for Losses			Total Allowance for Losses
	(in thousands)
Beginning Balance	$	4,480	$	2,083	$	6,563	$	5,864	$	4,263		$	10,127
Provision for/(release of) losses	49		14		63		76		(772		)	(696		)
Ending Balance	$	4,529	$	2,097	$	6,626	$	5,940	$	3,491		$	9,431

During first quarter 2016, Farmer Mac recorded provisions to its allowance for loan losses of $49,000 and provisions to its reserve for losses of $14,000. The provisions to the allowance for loan losses recorded during first quarter 2016 were attributable to to an increase in the specific allowance for on-balance sheet impaired loans due to a modest increase in the balance of such loans. The provisions were partially offset by releases from the general allowance due to repayments of on-balance sheet Agricultural Storage and Processing loans. Farmer Mac recorded no charge-offs to its allowance for loan losses during first quarter 2016.

During first quarter 2015, Farmer Mac recorded provisions for its allowance for loan losses of $0.1 million and releases from its reserve for losses of $0.8 million, primarily related to repayments of Agricultural Storage and Processing loans underlying LTSPCS. Farmer Mac recorded no charge-offs to its allowance for loan losses during first quarter 2015.

The following tables present the changes in the total allowance for losses for the three months ended March 31, 2016 and 2015 by commodity type:

Table 5.3



	March 31, 2016
	Crops		Permanent Plantings		Livestock			Part-time Farm		Ag. Storage and Processing			Other		Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	2,791	$	931	$	1,781		$	408	$	649		$	3	$	6,563
Provision for/(release of) losses	101		6		(18		)	36		(62		)	—		63
Ending Balance	$	2,892	$	937	$	1,763		$	444	$	587		$	3	$	6,626



	March 31, 2015
	Crops		Permanent Plantings		Livestock			Part-time Farm			Ag. Storage and Processing			Other		Total
	(in thousands)

For the Three Months Ended:
Beginning Balance	$	2,519	$	2,159	$	1,423		$	467		$	3,552		$	7	$	10,127
Provision for/(release of) losses	121		125		(80		)	(8		)	(854		)	—		(696		)
Ending Balance	$	2,640	$	2,284	$	1,343		$	459		$	2,698		$	7	$	9,431

Schedule of Allowance for Losses by Impairment Method and Commodity [Table Text Block]

The following tables present the unpaid principal balances of loans held and loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities and the related total allowance for losses by impairment method and commodity type as of March 31, 2016 and December 31, 2015:

Table 5.4



	As of March 31, 2016
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment:
On-balance sheet	$	1,938,160	$	441,233	$	450,524	$	116,093	$	15,501	$	3,661	$	2,965,172
Off-balance sheet	1,291,650		472,190		745,414		113,624		44,369		5,178		2,672,425
Total	$	3,229,810	$	913,423	$	1,195,938	$	229,717	$	59,870	$	8,839	$	5,637,597
Individually evaluated for impairment:
On-balance sheet	$	21,078	$	19,896	$	8,700	$	7,612	$	—	$	—	$	57,286
Off-balance sheet	6,249		2,971		8,543		1,143		—		—		18,906
Total	$	27,327	$	22,867	$	17,243	$	8,755	$	—	$	—	$	76,192
Total Farm & Ranch loans:
On-balance sheet	$	1,959,238	$	461,129	$	459,224	$	123,705	$	15,501	$	3,661	$	3,022,458
Off-balance sheet	1,297,899		475,161		753,957		114,767		44,369		5,178		2,691,331
Total	$	3,257,137	$	936,290	$	1,213,181	$	238,472	$	59,870	$	8,839	$	5,713,789
Allowance for Losses:
Collectively evaluated for impairment:
On-balance sheet	$	1,930	$	450	$	654	$	144	$	61	$	—	$	3,239
Off-balance sheet	318		176		269		60		526		3		1,352
Total	$	2,248	$	626	$	923	$	204	$	587	$	3	$	4,591
Individually evaluated for impairment:
On-balance sheet	$	449	$	216	$	421	$	204	$	—	$	—	$	1,290
Off-balance sheet	195		95		419		36		—		—		745
Total	$	644	$	311	$	840	$	240	$	—	$	—	$	2,035
Total Farm & Ranch loans:
On-balance sheet	$	2,379	$	666	$	1,075	$	348	$	61	$	—	$	4,529
Off-balance sheet	513		271		688		96		526		3		2,097
Total	$	2,892	$	937	$	1,763	$	444	$	587	$	3	$	6,626



	As of December 31, 2015
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment:
On-balance sheet	$	1,911,039	$	433,654	$	444,320	$	92,712	$	15,944	$	3,199	$	2,900,868
Off-balance sheet	1,313,872		483,473		777,663		110,378		56,208		7,142		2,748,736
Total	$	3,224,911	$	917,127	$	1,221,983	$	203,090	$	72,152	$	10,341	$	5,649,604
Individually evaluated for impairment:
On-balance sheet	$	12,803	$	21,247	$	5,958	$	7,261	$	9,838	$	—	$	57,107
Off-balance sheet	5,937		3,037		8,840		774		—		—		18,588
Total	$	18,740	$	24,284	$	14,798	$	8,035	$	9,838	$	—	$	75,695
Total Farm & Ranch loans:
On-balance sheet	$	1,923,842	$	454,901	$	450,278	$	99,973	$	25,782	$	3,199	$	2,957,975
Off-balance sheet	1,319,809		486,510		786,503		111,152		56,208		7,142		2,767,324
Total	$	3,243,651	$	941,411	$	1,236,781	$	211,125	$	81,990	$	10,341	$	5,725,299
Allowance for Losses:
Collectively evaluated for impairment:
On-balance sheet	$	1,968	$	434	$	702	$	116	$	167	$	—	$	3,387
Off-balance sheet	347		137		292		65		482		3		1,326
Total	$	2,315	$	571	$	994	$	181	$	649	$	3	$	4,713
Individually evaluated for impairment:
On-balance sheet	$	290	$	218	$	384	$	201	$	—	$	—	$	1,093
Off-balance sheet	186		142		403		26		—		—		757
Total	$	476	$	360	$	787	$	227	$	—	$	—	$	1,850
Total Farm & Ranch loans:
On-balance sheet	$	2,258	$	652	$	1,086	$	317	$	167	$	—	$	4,480
Off-balance sheet	533		279		695		91		482		3		2,083
Total	$	2,791	$	931	$	1,781	$	408	$	649	$	3	$	6,563

Impaired Financing Receivables [Table Text Block]

The following tables present by commodity type the unpaid principal balances, recorded investment, and specific allowance for losses related to impaired loans and the recorded investment in loans on nonaccrual status as of March 31, 2016 and December 31, 2015:

Table 5.5



	As of March 31, 2016
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	3,982	$	12,556	$	5,042	$	2,126	$	—	$	—	$	23,706
Unpaid principal balance	3,540		12,463		4,327		1,832		—		—		22,162
With a specific allowance:
Recorded investment⁽¹⁾	24,255		10,460		12,900		6,971		—		—		54,586
Unpaid principal balance	23,787		10,404		12,916		6,923		—		—		54,030
Associated allowance	644		311		840		240		—		—		2,035
Total:
Recorded investment	28,237		23,016		17,942		9,097		—		—		78,292
Unpaid principal balance	27,327		22,867		17,243		8,755		—		—		76,192
Associated allowance	644		311		840		240		—		—		2,035

Recorded investment of loans on nonaccrual status⁽²⁾	$	5,514	$	15,331	$	4,510	$	5,985	$	—	$	—	$	31,340


⁽¹⁾	Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on $48.8 million (62 percent) of impaired loans as of March 31, 2016, which resulted in a specific reserve of $1.1 million.


⁽²⁾	Includes $2.2 million of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.



	As of December 31, 2015
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	3,772	$	12,340	$	5,644	$	1,851	$	—	$	—	$	23,607
Unpaid principal balance	3,720		12,346		5,645		1,851		—		—		23,562
With a specific allowance:
Recorded investment⁽¹⁾	15,103		11,939		9,050		6,185		9,838		—		52,115
Unpaid principal balance	15,020		11,938		9,153		6,184		9,838		—		52,133
Associated allowance	476		360		787		227		—		—		1,850
Total:
Recorded investment	18,875		24,279		14,694		8,036		9,838		—		75,722
Unpaid principal balance	18,740		24,284		14,798		8,035		9,838		—		75,695
Associated allowance	476		360		787		227		—		—		1,850

Recorded investment of loans on nonaccrual status⁽²⁾	$	5,105	$	16,546	$	4,313	$	5,870	$	9,838	$	—	$	41,672


⁽¹⁾	Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on $46.4 million (61 percent) of impaired loans as of December 31, 2015, which resulted in a specific reserve of $1.0 million.


⁽²⁾	Includes $14.7 million of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.

The following table presents by commodity type the average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2016 and 2015:

Table 5.6



	March 31, 2016
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
For the Three Months Ended:
Average recorded investment in impaired loans	$	23,555	$	23,648	$	16,318	$	8,567	$	4,919	$	—	$	77,007
Income recognized on impaired loans	2		44		15		72		—		—		133



	March 31, 2015
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
For the Three Months Ended:
Average recorded investment in impaired loans	$	19,218	$	40,764	$	15,311	$	12,507	$	—	$	—	$	87,800
Income recognized on impaired loans	282		83		148		58		—		—		571

Schedule of Certain Loans Acquired in Transfer Acquired During Period [Table Text Block]

The following tables present information related to Farmer Mac's acquisition of defaulted loans for the three months ended March 31, 2016 and 2015 and the outstanding balances and carrying amounts of all such loans as of March 31, 2016 and December 31, 2015:

Table 5.7



	For the Three Months Ended
	March 31, 2016		March 31, 2015
	(in thousands)
Unpaid principal balance at acquisition date:
Loans underlying LTSPCs	$	1,267	$	—
Loans underlying off-balance sheet Farmer Mac Guaranteed Securities	148		657
Total unpaid principal balance at acquisition date	1,415		657
Contractually required payments receivable	1,435		—
Impairment recognized subsequent to acquisition	—		52
Recovery/release of allowance for defaulted loans	4		121



	As of
	March 31, 2016		December 31, 2015
	(in thousands)
Outstanding balance	$	25,893	$	36,195
Carrying amount	23,766		34,015

Past Due Financing Receivables [Table Text Block]

Net credit losses and 90-day delinquencies as of and for the periods indicated for loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs are presented in the table below. As of March 31, 2016, there were no delinquencies and no probable losses inherent in Farmer Mac's Rural Utilities loan portfolio and Farmer Mac had not experienced credit losses on any Rural Utilities loans.

Table 5.8



	90-Day Delinquencies⁽¹⁾				Net Credit Losses
	As of				For the Three Months Ended
	March 31, 2016		December 31, 2015		March 31, 2016		March 31, 2015
	(in thousands)
On-balance sheet assets:
Farm & Ranch:
Loans	$	29,184	$	26,935	$	39	$	—
Total on-balance sheet	$	29,184	$	26,935	$	39	$	—
Off-balance sheet assets:
Farm & Ranch:
LTSPCs	$	5,496	$	5,201	$	—	$	—
Total off-balance sheet	$	5,496	$	5,201	$	—	$	—
Total	$	34,680	$	32,136	$	39	$	—


⁽¹⁾	Includes loans and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

Of the $29.2 million and $26.9 million of on-balance sheet loans reported as 90-day delinquencies as of March 31, 2016 and December 31, 2015, respectively, none were loans subject to "removal-of-account" provisions.

Financing Receivable Credit Quality Indicators [Table Text Block]

Credit Quality Indicators

The following tables present credit quality indicators related to Farm & Ranch loans held and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities as of March 31, 2016 and December 31, 2015:

Table 5.9



	As of March 31, 2016
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade⁽¹⁾
On-balance sheet:
Acceptable	$	1,928,285	$	440,033	$	425,346	$	113,197	$	15,501	$	3,661	$	2,926,023
Special mention⁽²⁾	9,875		1,200		25,178		2,896		—		—		39,149
Substandard⁽³⁾	21,078		19,896		8,700		7,612		—		—		57,286
Total on-balance sheet	$	1,959,238	$	461,129	$	459,224	$	123,705	$	15,501	$	3,661	$	3,022,458
Off-Balance Sheet:
Acceptable	$	1,248,018	$	439,781	$	712,410	$	107,708	$	42,169	$	4,525	$	2,554,611
Special mention⁽²⁾	34,114		28,933		21,202		1,268		2,200		552		88,269
Substandard⁽³⁾	15,767		6,447		20,345		5,791		—		101		48,451
Total off-balance sheet	$	1,297,899	$	475,161	$	753,957	$	114,767	$	44,369	$	5,178	$	2,691,331
Total Ending Balance:
Acceptable	$	3,176,303	$	879,814	$	1,137,756	$	220,905	$	57,670	$	8,186	$	5,480,634
Special mention⁽²⁾	43,989		30,133		46,380		4,164		2,200		552		127,418
Substandard⁽³⁾	36,845		26,343		29,045		13,403		—		101		105,737
Total	$	3,257,137	$	936,290	$	1,213,181	$	238,472	$	59,870	$	8,839	$	5,713,789

Commodity analysis of past due loans⁽¹⁾
On-balance sheet	$	11,785	$	10,867	$	3,873	$	2,659	$	—	$	—	$	29,184
Off-balance sheet	692		—		4,322		482		—		—		5,496
90 days or more past due	$	12,477	$	10,867	$	8,195	$	3,141	$	—	$	—	$	34,680


⁽¹⁾	Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.


⁽²⁾	Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.


⁽³⁾	Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.



	As of December 31, 2015
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade⁽¹⁾
On-balance sheet:
Acceptable	$	1,888,762	$	431,038	$	409,003	$	89,541	$	15,944	$	3,199	$	2,837,487
Special mention⁽²⁾	22,255		2,616		35,317		2,918		—		—		63,106
Substandard⁽³⁾	12,825		21,247		5,958		7,514		9,838		—		57,382
Total on-balance sheet	$	1,923,842	$	454,901	$	450,278	$	99,973	$	25,782	$	3,199	$	2,957,975
Off-Balance Sheet
Acceptable	$	1,279,454	$	473,335	$	753,472	$	102,990	$	56,208	$	6,517	$	2,671,976
Special mention⁽²⁾	24,422		7,226		13,121		2,938		—		523		48,230
Substandard⁽³⁾	15,933		5,949		19,910		5,224		—		102		47,118
Total off-balance sheet	$	1,319,809	$	486,510	$	786,503	$	111,152	$	56,208	$	7,142	$	2,767,324
Total Ending Balance:
Acceptable	$	3,168,216	$	904,373	$	1,162,475	$	192,531	$	72,152	$	9,716	$	5,509,463
Special mention⁽²⁾	46,677		9,842		48,438		5,856		—		523		111,336
Substandard⁽³⁾	28,758		27,196		25,868		12,738		9,838		102		104,500
Total	$	3,243,651	$	941,411	$	1,236,781	$	211,125	$	81,990	$	10,341	$	5,725,299

Commodity analysis of past due loans⁽¹⁾
On-balance sheet	$	4,656	$	7,405	$	2,517	$	2,519	$	9,838	$	—	$	26,935
Off-balance sheet	511		—		4,542		148		—		—		5,201
90 days or more past due	$	5,167	$	7,405	$	7,059	$	2,667	$	9,838	$	—	$	32,136


⁽¹⁾	Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.


⁽²⁾	Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.


⁽³⁾	Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Concentrations of Credit Risk

The following table sets forth the geographic and commodity/collateral diversification, as well as the range of original loan-to-value ratios, for all Farm & Ranch loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs as of March 31, 2016 and December 31, 2015:

Table 5.10



	As of
	March 31, 2016		December 31, 2015
	(in thousands)
By commodity/collateral type:
Crops	$	3,257,137	$	3,243,651
Permanent plantings	936,290		941,411
Livestock	1,213,181		1,236,781
Part-time farm	238,472		211,125
Ag. Storage and Processing	59,870		81,990
Other	8,839		10,341
Total	$	5,713,789	$	5,725,299
By geographic region⁽¹⁾:
Northwest	$	589,786	$	582,127
Southwest	1,692,783		1,726,927
Mid-North	2,013,333		2,009,654
Mid-South	764,476		769,831
Northeast	213,848		215,883
Southeast	439,563		420,877
Total	$	5,713,789	$	5,725,299
By original loan-to-value ratio:
0.00% to 40.00%	$	1,567,093	$	1,594,818
40.01% to 50.00%	1,313,479		1,279,321
50.01% to 60.00%	1,582,340		1,593,025
60.01% to 70.00%	1,087,370		1,107,710
70.01% to 80.00%	141,288		126,860
80.01% to 90.00%	22,219		23,565
Total	$	5,713,789	$	5,725,299


⁽¹⁾	Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

The original loan-to-value ratio is calculated by dividing the loan principal balance at the time of guarantee, purchase, or commitment by the appraised value at the date of loan origination or, when available, the updated appraised value at the time of guarantee, purchase, or commitment. Current loan-to-value ratios may be higher or lower than the original loan-to-value ratios.